President Trump signed proclamations on Thursday afternoon setting new tariffs on steel and aluminum imports.  The president set a 25-percent tariff on imported steel and a 10-percent tariff on imported aluminum.  “Today, I am defending America’s national security by placing tariffs on foreign imports of steel and aluminum,” Trump said at a White House ceremony with steel and aluminum workers present.

Trump announced the planned tariffs under Section 232 of the 1962 Trade Expansion Act that gives the president broad powers to impose trade restrictions on domestic security grounds. After a months long investigation, the Commerce Department found that imports of steel and aluminum threaten national security by undermining the long-term vitality of those industries.  The tariffs will not go into effect at least for another 15 days, the Trump administration said.

More than 100 House Republicans led by Ways and Means Committee Chairman Kevin Brady (R-TX) had urged Trump to reconsider tariffs, warning that they would cost American jobs, raise prices for consumers, and hurt domestic manufacturing.  In addition, Thomas Donohue, head of the U.S. Chamber of Commerce, said his organization was very concerned about the potential for retaliation and a trade war.

As a result of President Trump’s announcement, global tensions have been escalating. Wang Yi, China’s foreign minister, who spoke at the National People’s Congress in Beijing earlier this week, vowed a “justified and necessary response to any efforts to incite a trade war.”  He urged the United States to work with China on a mutually beneficial solution.  “A trade war has never been the right way to solve the problem, especially under globalization.” Wang said. “

This week the European Union also warned that it would respond with its own 25-percent tariff to hit $23.5 billion of American goods should President Trump go forward with the tariffs. The EU would target iconic U.S. brands produced in key Republican states on a range of consumer, agricultural, and steel products, according to a document drawn up by the European Commission.

If the European Union and other countries want to be excluded from the new tariffs, they will have to negotiation deals to address U.S. national security concerns about their steel and aluminum exports to the United States, a White House official said yesterday.

U.S. Trade Representative Robert Lighthizer, who will be in Brussels on Saturday to meet with his EU and Japanese counterparts, will take the lead in the steel and aluminum talks.

Canada and Mexico, which are in the midst of talks with the United States on renegotiating NAFTA, will be initially excluded from the tariffs, the Trump administration said.  They would loose that exemption if they cannot agree to an updated North American Free Trade Agreement with the United States  If NAFTA fails, Canada and Mexico would face the same tariffs as other nations.

Canada is the largest supplier of steel and aluminum to United States.  Mexico is the fourth largest steel provider to the United States. In 2017, the United States imported 26.9 metric tons of steel, up from 22.5 million tons in 2016.  That represents about 8 percent of U.S. steel imported globally and less than 1 percent of all U.S. imports.  The U.S. imports about 90 percent of its aluminum.